New revenue stream for AD gas producers

Growing demand for green energy across Europe could help boost income from anaerobic digestion plants.
Growing demand for green energy across Europe could help boost income from anaerobic digestion plants.

Farmers and rural businesses with an anaerobic digestion (AD) plant could secure a 10-20% premium on the gas they produce by tapping into growing demand for green energy across Europe.

Although currently most AD plants burn the gas they produce to generate electricity and heat, there is an emerging market for bio-methane, which can be injected directly into the gas main, says Richard Palmer, Energy Consultant at Butler Sherborn Energy.

He said: “Although consumers in the UK are reluctant to pay a premium for this green energy, corporate energy customers across Europe are increasingly keen to demonstrate their energy credentials.

“We have secured an agreement with a major energy company, which can pipe green gas through the interconnected gas mains to European customers, so can now offer British producers a share of this premium market.”

The development comes at a critical time for the British renewable energy industry, which is looking increasingly unstable as a result of Government spending reviews and Brexit.

Lucy Hopwood, Director at bio-economy consultant NNFCC, says that gaining added value for green gas is very timely in light of recent tariff reductions, adding: “Developers are also starting to look at how they can increase productivity, without the expense of capital outlay.”

Gas producers will have to register and meet the sustainability criteria of the International Sustainability and Carbon Certification body.

Mr Palmer said: “Most farmers’ AD feedstock will meet these criteria and the costs of any audit required will be covered by the energy company.

“The gas premium will depend on the carbon level of the feedstock, and as power purchase agreements can be made in advance it does not matter if the renewal on any existing gas contract, or commissioning of a new bio-methane plant, is over 12 months from now.”

For more information contact Richard Palmer on 01285 883751.